Contribution to the UK Economy

Contribution to the Inland Revenue

The UK economy has benefited from £203 billion (2004 prices) in North Sea taxes since the mid 1960’s. Tax receipts have been on the increase since 2003 and rose by £1.0 billion to £5.2 billion in tax year 2004/5. Tax receipts in the current tax year are projected by HM Treasury to increase to £7.1 billion, a 34% increase on the previous year. This is caused in part by the changes in the 2005 Budget, which accelerated payments of ring fence Corporation Tax and Supplementary Corporation Tax, as well as continued strong oil and gas prices, (see Figure 7). Treasury projections for 2005/6 are based on $40 oil price; if oil price and gas prices are higher, then tax receipts will increase accordingly.

Figure 7: UK North Sea Taxes (2004 Prices), 1991-2004